Exclusive: China the most important player in the hydrogen industry

Exclusive: China the most important player in the hydrogen industry

Security, climate change, air pollution and global competitiveness: these are the four factors driving a hydrogen economy in China.

According to the study Overview of hydrogen and fuel cell developments in China, China’s energy security is challenged by the increasing need for energy and quick depletion of fossil fuels, while cities are struggling with unhealthy levels of pollution.

Hydrogen can be produced from a variety of sources and help diversify China’s energy system, which is currently dominated by coal and dependent on imported oil and gas resources.

Since 2010, China has not only become the world’s largest energy user, but also the largest producer of hydrogen, generating roughly 20-22 million tonnes of hydrogen in 2018.

To gain a better understanding of China’s plans for hydrogen, H2 View sat down with Chen Wei, from the China International Hydrogen and Fuel Cell Conference and Exhibition (CHFCE).

H2 View (H2V): Thanks for your time today. Could you start by telling us a little about your role in organising the CHFCE?

Chen Wei (CW): I am mainly responsible for CHFCE international communications, establishing cooperation relationships with countries and regions around the world willing to promote the hydrogen and fuel cell industry, working together with exhibition/conference organisers, promoting hydrogen and fuel cell industry communications and cooperation between China and other countries.

H2V: H2 View understands next year CHFCE will celebrate five years. What can you tell us about next year’s event?

CW: CHFCE 2020 is indeed our 5th session. Our conference agenda will be released at the beginning of December.

After deep investigation and study of the industry, China Machinery Industry Federation (CMIF) has proposed the plan of ‘industrialisation, domestication and localisation’ of fuel cell stacks in China.

During CHFCE 2020, we will display the whole industry chain of hydrogen and fuel cells, especially how to lower the cost of fuel cell stacks through various technologies and non-technology methods.

Meanwhile, we will set up the application sections during CHFCE 2020 conference, such as hydrogen and fuel cell heavy duty trucks, SOFC combination with energy industries etc.

Furthermore, we will establish ‘China Machinery Industry Federation – Hydrogen Branch Association’, to promote China’s hydrogen and fuel cell industry more actively.

H2V: Things must have changed a lot in five years in the hydrogen space. What can you tell us about China’s journey over the past five years to now?

CW: In the past five years, the most important change is that China has become the most important player in the hydrogen industry, around the world. China’s hydrogen industry marketing has become the most important one.

H2V: You previously told us that the hydrogen industry is booming this year. Why do you think hydrogen has taken off?

CW: From 2009 to 2016, the investments in the hydrogen industry, including governments and private sections, are about RMB 2bn, which has increased four to five times.

China’s fuel cell stack and fuel cell system companies have grown from just a few companies to 30.

In 2018, China produced nearly 2,000 hydrogen and fuel cell vehicles, with a total capacity of fuel cell stacks about 50MW.

In my opinion, these numbers would be the evidence that China’s hydrogen and fuel cell industry in taken off.

H2V: Focusing on the past 12 months specifically, what changes have you seen in the hydrogen ecosystem and community in China?

CW: In the past two years, China’s hydrogen and fuel cell industry has seen many great changes.

Two years ago, it was all about technology and companies seeking purchasing technologies as well as their own research and development.

More recently, the situation has changed and the technical capabilities of these domestic companies has been realised.

Now most of the companies are focusing on industrialisation. Therefore, lowering the cost would be the next stage for the hydrogen and fuel cell industry in China.

H2V: China wants to lead the world in hydrogen fuel cells. What are the big projects currently underway in the country? 

CW: I think the most important thing is the definition of a hydrogen and fuel cell industry in the 14th Five-year development plan, launched at the start of this year.

As far as we know, currently in China, the discussion and debate is not just about how to develop the hydrogen economy, but how to promote the hydrogen and fuel cell industry with better methods.

At present, hydrogen energy projects are mainly concentrated by a few companies, with lots of other companies preparing or considering setting up production lines or focusing on the key technologies/components’ developments.

There might be some government projects, but all rely on the reduction of the costs.

H2V: What is the government doing to support these plans? What policy/regulation has been/is being implemented?

CW: Firstly, as far as we know, only China’s government still provide huge financial subsidies on hydrogen and fuel cell vehicles.

Secondly, relevant ministries and commissions still support the development of hydrogen and fuel cell industry through many funding projects.

Most importantly, the central government of China has always been encouraging and supporting a hydrogen and fuel cell industry.

Compared with North America, Europe, Japan and South Korea, China’s central government has not proposed a special project because right now the existing policies are enough to support the development of hydrogen and fuel cell industry.

With the development of industry, if necessary, we believe that the relevant supportive policies will be launched very quickly.

Furthermore, many provinces and municipalities in China pay close attention to the hydrogen and fuel cell industry, from encouraging policies to financial support.

It’s worth noting that China’s tax system has been changed, local governments have significantly increased its tax sharing ratio with central government.

This also provides more financial support for local governments to develop various hi-tech industries, including a hydrogen and fuel cell industry.

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